Housing project
Report No: ; Type: Report/Evaluation Memorandum ; Country: South Korea; Region: East Asia And Pacific; Sector: Urban Housing; Major Sector:
                                                Urban Development; ProjectID: P004159


    December 22, 1995

    The Republic of Korea: Housing Project (Loan 3329-KO)

    The Implementation Completion Report (ICR) on the Republic of Korea Housing project (Loan 3329-KO,
    approved in FY92) was prepared by the East Asia and Pacific Regional Office, with Appendix B contributed by
    the Borrower. The loan for US$100 million was approved on July 19, 1991, and closed on June 30, 1995, as
    scheduled. The loan was fully disbursed by the end of 1993.

    The project's objectives were: (i) to better target public housing assistance, so that it would reach more urban
    households below the median income; and (ii) to improve the housing sector's regulatory framework so as to
    promote provision of housing services to the entire population by the private sector. Project components
    consisted of: (a) an investment component (the entire loan amount) to finance mortgage loans to target
    beneficiaries; and (b) a policy and regulatory reform program based on studies financed by the Government.

    The project objectives were achieved. The loan was fully disbursed in two years instead of the estimated three
    and a half years. Moreover, major housing and land reforms were implemented. For instance, land-use laws
    were modified to significantly increase the amount of developable land; the private sector was encouraged to
    provide infrastructure for housing sites; and the Government began phasing out its subsidized permanent rental
    housing units. The impact of these reforms will continue to be monitored with the help of the indicators system
    put in place under the project with the help of the Korean Institute for Human Settlements.

    The ICR is of good quality. It covers all the issues adequately, especially the fit between the project and the
    Government's broader policy in the urban sector. Two important lessons drawn from this operation are that: (i)
    the rate of return is inadequate in evaluating housing projects geared to increase market efficiency; and (ii) the
    incorporation into project design of clear monitoring indicators for sector performance provided a good vehicle
    for tracking sector improvements during project execution.

    The ICR rates the project outcome as satisfactory, sustainability as likely, and institutional development as
    substantial. The Operations Evaluation Department (OED) agrees with these ratings and it rates the performance
    of the Bank as satisfactory.

    No audit is planned.